FAC Explorer

Audit 346929

FY End
2024-06-30
Total Expended
$5.24M
Findings
2
Programs
24
Organization: City of Southfield, Michigan (MI)
Year: 2024 Accepted: 2025-03-19
Auditor: Plante & Moran PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
528943 2024-007 Significant Deficiency - N
1105385 2024-007 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $2.29M Yes 1
17.258 Wioa Adult Program $257,573 - 0
17.259 Wioa Youth Activities $205,042 - 0
93.558 Temporary Assistance for Needy Families $191,182 - 0
17.207 Employment Service/wagner-Peyser Funded Activities $186,661 - 0
17.278 Wioa Dislocated Worker Formula Grants $179,133 - 0
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $128,086 - 0
17.225 Unemployment Insurance $92,690 - 0
16.922 Equitable Sharing Program $70,695 - 0
14.218 Community Development Block Grants/entitlement Grants $47,865 - 0
20.600 State and Community Highway Safety $41,637 - 0
32.009 Emergency Connectivity Fund Program $39,950 - 0
17.245 Trade Adjustment Assistance $37,332 - 0
21.019 Covid-19 - Coronavirus Relief Fund $33,734 - 0
17.268 H-1b Job Training Grants $16,994 - 0
17.285 Registered Apprenticeship $15,833 - 0
97.042 Emergency Management Performance Grants $15,776 - 0
21.027 Covdi-19 - Coronavirus State and Local Fiscal Recovery Funds $12,000 - 0
10.675 Urban and Community Forestry Program $10,000 - 0
45.310 Covid-19 - Grants to States $8,122 - 0
11.307 Economic Adjustment Assistance $6,760 - 0
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States $3,829 - 0
17.801 Jobs for Veterans State Grants $3,478 - 0
93.136 Injury Prevention and Control Research and State and Community Based Programs $800 - 0

Contacts

Name Title Type
FD51FZFMEDP8 Austen Michaels Auditee
2487965264 Alisha Watkins Auditor
No contacts on file

Notes to SEFA

Accounting Policies: The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of City of Southfield, Michigan, (the “City”) under programs of the federal government for the year ended June 30, 2024. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City. Expenditures reported in the Schedule are reported on the same basis of accounting as the financial statements. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The pass through entity identifying numbers are presented where available. The City has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The City has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs as allowed under the Uniform Guidance.

Finding Details

Finding 2024-007
Assistance Listing Number, Federal Agency, and Program Name 14.871, U.S. Department of Housing and Urban Development (HUD), Section 8 Housing Choice Vouchers Program Federal Award Identification Number and Year Not applicable Pass through Entity Not applicable Finding Type Significant deficiency Repeat Finding No Criteria Per 24 CFR Chapter IX, Part 982, Subpart I, Section 982.405 (a), the PHA must inspect the unit prior to the initial term of the lease to determine if the unit meets the Housing Quality Standards (HQS) as prescribed by HUD. If the HQS standards are not met, the owner must correct the deficiency within 30 days of the notification from the PHA (Section 982.405 (d)(2)). Per Section 982.405(j)(4), if the owner fails to correct the deficiencies within the 30 day cure period, the PHA must withhold the housing assistance payments until the owner makes the repairs and the PHA verifies the correction. Condition The City had insufficient controls in place that resulted in the City releasing HAP payments on behalf of a participant, despite a failed HQS inspection, which was not rectified within the 30-day cure period or the months that followed. Questioned Costs $1,542 Identification of How Questioned Costs Were Computed Questioned costs are all the housing assistance payments made during the City's fiscal year ended June 30, 2024 on behalf of this participant, which was July 2023 to January 2024 Context During tenant file testing, we identified the City had one participant whose initial HQS inspection failed and lacked supporting information to demonstrate the deficiencies were cured within the 30-day cure period, yet teh City continued to provide the participant with housing assistance payments throughout the year. Cause and Effect The City was not able to provide sufficient documentation of the owner correcting the deficiencies from the initial failed HQS inspection and did not terminate housing assistance payments to the participants. This resulted in the participant receiving ineligible housing assistance payments of $1,058 during the year under audit and $1,542 in totality, inclusive of amounts pertaining to the City's prior fiscal year. Recommendation We recommend the City implement controls surrounding the follow up of failed initial inspections after the 30 day cure period is over to ensure the owner corrected all deficiencies. We also recommend the City obtain these results from the third party inspectors in a timely manner in order for the City to stop housing assistance payments immediately, and remain compliance with the program requirement. Views of Responsible Officials and Corrective Action Plan The City has implemented controls with our inspection vendors to ensure reinspection is completed within the necessary 30 days and communicated to the PHA. If the owner fails to make the necessary corrections within the 30 day cure period, the PHA will withhold housing assistance payments in accordance with 24 CFR Chapter IX, Part 982 until the PHA verifies the corrections have been made. The City has also implemented a process to ensure reinspection documentation, when applicable, is included in the participant file. We expect this finding to be corrected by June 30, 2025.
Finding 2024-007
Assistance Listing Number, Federal Agency, and Program Name 14.871, U.S. Department of Housing and Urban Development (HUD), Section 8 Housing Choice Vouchers Program Federal Award Identification Number and Year Not applicable Pass through Entity Not applicable Finding Type Significant deficiency Repeat Finding No Criteria Per 24 CFR Chapter IX, Part 982, Subpart I, Section 982.405 (a), the PHA must inspect the unit prior to the initial term of the lease to determine if the unit meets the Housing Quality Standards (HQS) as prescribed by HUD. If the HQS standards are not met, the owner must correct the deficiency within 30 days of the notification from the PHA (Section 982.405 (d)(2)). Per Section 982.405(j)(4), if the owner fails to correct the deficiencies within the 30 day cure period, the PHA must withhold the housing assistance payments until the owner makes the repairs and the PHA verifies the correction. Condition The City had insufficient controls in place that resulted in the City releasing HAP payments on behalf of a participant, despite a failed HQS inspection, which was not rectified within the 30-day cure period or the months that followed. Questioned Costs $1,542 Identification of How Questioned Costs Were Computed Questioned costs are all the housing assistance payments made during the City's fiscal year ended June 30, 2024 on behalf of this participant, which was July 2023 to January 2024 Context During tenant file testing, we identified the City had one participant whose initial HQS inspection failed and lacked supporting information to demonstrate the deficiencies were cured within the 30-day cure period, yet teh City continued to provide the participant with housing assistance payments throughout the year. Cause and Effect The City was not able to provide sufficient documentation of the owner correcting the deficiencies from the initial failed HQS inspection and did not terminate housing assistance payments to the participants. This resulted in the participant receiving ineligible housing assistance payments of $1,058 during the year under audit and $1,542 in totality, inclusive of amounts pertaining to the City's prior fiscal year. Recommendation We recommend the City implement controls surrounding the follow up of failed initial inspections after the 30 day cure period is over to ensure the owner corrected all deficiencies. We also recommend the City obtain these results from the third party inspectors in a timely manner in order for the City to stop housing assistance payments immediately, and remain compliance with the program requirement. Views of Responsible Officials and Corrective Action Plan The City has implemented controls with our inspection vendors to ensure reinspection is completed within the necessary 30 days and communicated to the PHA. If the owner fails to make the necessary corrections within the 30 day cure period, the PHA will withhold housing assistance payments in accordance with 24 CFR Chapter IX, Part 982 until the PHA verifies the corrections have been made. The City has also implemented a process to ensure reinspection documentation, when applicable, is included in the participant file. We expect this finding to be corrected by June 30, 2025.